A Modification of Time-Driven Activity-Based Costing for Comparing Cost of Telehealth and In-Person Visits

Cost studies of telehealth (TH) and virtual visits are few and report mixed results of the economic impact of virtual care and TH. Largely missing from the literature are studies that identify the cost of delivering TH versus in-person care. The objective was to demonstrate a modified time-driven activity-based costing (TDABC) approach to compare weighted labor cost of an in-person pediatric clinic sick visit before COVID-19 to the same virtual and in-person sick-visit during COVID-19. We examined visits before and during COVID-19 using: (1) recorded structured interviews with providers; (2) iterative workflow mapping; (3) electronic health records time stamps for validation; (4) standard cost weights for wages; and (5) clinic CPT billing code mix for complexity weighs. We examined the variability in estimated time using a decision tree model and Monte Carlo simulations. Workflow charts were created for the clinic before COVID-19 and during COVID-19. Using TDABC and simulations for varying time, the weighted cost of clinic labor for sick visit before COVID-19 was $54.47 versus $51.55 during COVID-19. The estimated mean labor cost for care during the pandemic has not changed from the pre-COVID period; however, this lack of a difference is largely because of the increased use of TH. : Our TDABC approach is feasible to use under virtual working conditions; requires minimal provider time for execution; and generates detailed cost estimates that have "face validity" with providers and are relevant for economic evaluation.